Shutting Down Nuclear and Building Renewables; Easier Said than Done

Energy agencies and board rooms are hopping these days. Plans are being made to transform the California energy landscape as nothing has since energy deregulation in 1996. Two are big ideas. One would shut down nuclear power in California, replacing the lost power with renewable energy, conservation and storage. The other would redesign how energy is delivered in the state by forming a Western States Power grid aimed at sharing power more efficiently and developing renewables.

The shut down of Diablo Canyon, negotiated between PG&E, environmental organizations, unions and others, hinges on what some consider too long a time line. The utility gets nine more years, until their NRC licenses run out, for the reactors to continue challenging geology. Others consider the deal a success, “Only nine more years of reactor operation!” Unfortunately, we have seen this beast resurrect before. If it really does happen in nine years, and all goes well along the faults, despite production of tons more waste with nowhere to be put, it may be, as Lt. Governor Gavin Newsome calls it, “the best deal we could get.”

PG&E, who came to the party late, will use the nine year time line to catch up, implementing a portfolio of renewables and conservation to replace 55% of the 2200 MW of power lost from the reactor shutdowns by 2030 The deal will soon go before the California Public Utilities Commission (CPUC) for consideration, and no guarantee of approval.

Another set of agencies are planning to allow a short-term spike in coal fired energy in to our state grid. In exchange, we are promised shrinking coal use in the future. It will be replaced mainly with wind through an interconnected multi-state grid that can take advantage of the best wind resources, mostly located far from large population centers.

California Senate Bill 350 (SB350)—the Clean Energy and Pollution Reduction Act—was passed in 2015 to set a process for getting 50% of the power going in to the California grid to be produced by renewable energy sources and lowering grid demand through conservation by 2030. Part of the legislation called on California Independent System Operator (CALISO or ISO), a non-profit agency set up during deregulation to develop an energy marketing system and maintain the state’s grid integrity, to study the feasibility of uniting California’s grids with other grid systems in the west to allow regional energy sharing.

A July 26 hearing in Sacramento sponsored by CALISO and attended by representatives from CPUC, California Energy Commission (CEC) and California Air Quality Management District (CAQMD) heard testimony from researchers on the economic and environmental benefits of joining the grids, and discussed the politics of governance.

Economically, there is strong potential for economic growth, from primary construction jobs in wind, solar and conservation, to secondary suppliers and transporters of hardware, to the multiplier effect supporting more jobs, and long-term savings to consumers. The first ten years, the build-out period, will produce more jobs in construction, manufacturing and transport. After 2030, with the build-out complete, longer-term benefits will accrue from an estimated $1-1.5 Billion annual savings by California consumers. That will be money that will likely stay in California; on average 70% of household income goes to pay for local services, as opposed to being sent out of state to pay for solar panels and other hardware in the construction phase.

Joining the grids was shown to help in developing both wind and solar power. California’s demand for renewable energy, it is felt, can help fuel wind farm constructions in the more sparsely populated mountain states, particularly Wyoming and New Mexico. These are also areas of great economic disadvantage, and are expected to be helped by job availability and cleaner environment.

Environmentally, the plan to join the grids is seen as a positive for land use, and especially the environmental impacts of large wind farms. California does not lend itself to large scale project footprints like wind farms and solar arrays due to the density of population, the biological diversity, and fertile agricultural lands of the state. It is felt the prairies and deserts of the mountain states and their resources of regular wind make an ideal match. Joining the California grid and its solar resources with the mountain grid’s wind resources would help promote growth of both industries and greater availability of renewables through out the grid.

The big environmental drawback to the plan, besides the grid itself, is the incorporation of coal-fired electricity in to the grid. PacifiCorp, whose grid goes from Montana through Wyoming and Colorado, owned by Warren Buffet’s Berkshire-Hathaway, currently has an energy mix that includes 60% coal-fired energy. Estimates are that in the first ten years of the integration, coal fired energy will increase slightly in the regional grid, then go down appreciably by 2030, when a more stout wind infrastructure is emplaced by PacifiCorp. Jonathan Weisgall of PacifiCorp said the company is committed to lowering greenhouse gas (GHG) emissions, saying they have already closed four coal processing plants due to lack of demand, and are making plans to retire or convert to natural gas 2800 MW of energy production, with a goal of going from 60% coal to 24% by 2035. The eventual goal at one of their other utilities in the region is wind capacity of 85%, which will not be possible, he says, without this regional grid.

Sierra Club was one of the first organizations present who voiced specific concerns about the prospect that coal, called “unspecified power” in the agreement, could get a boost from the grid unification.

It did not help that in the “Governance” section of the agreement, the goal of carbon tracking of resources was dropped as a key part of the proposal. CALISO assured that they will be tracking carbon within the state and conforming with lower GHG rules that have been legislated, and felt this responsibility could not be assigned to a regional entity. Still, coal power will be in the mix flowing in the grid, but California will not be buying it, for the most part. People were urged to take a long term view, which indicates there will be substantial cut-back in GHG production from coal by 2030 and beyond.

A number of groups present gave their support to a greater or lesser degree. The Save the Grid Coalition (GE, NRDC, UCS, others), Building Trades Council, Northwest Safe Energy Coalition, CBE and a number of renewable energy businesses and associations, spoke in favor of the agreement, some with reservations. The Safe Energy Coalition, for instance, wonders about investors, through investor-owned utilities, taking value out of the system.

The Utility Reform Network (TURN) had the most questions, about the process, how the agreement was written, who took part, etc.; technical questions on “capacity markets”; the proposed Western States Commission scope; and the need to protect against California giving away too much autonomy on environmental issues, among others.

That sentiment was echoed by Mary Nichols of the CAQMD, saying “we need assurances in the agreement as a mitigation factor that coal will not be given a new lease on life.”

The most stringent and vocal attacks on the agreement came from public interest attorney, Mike Aguirre, who said there is too much focus given to new production of Wyoming and New Mexico wind and not enough to conservation and localized grids and solar rooftops. He went on to call the agreement an effort to privatize ISO, an “unconstitutional delegation of authority” where investor-owned utilities and generation owners will get to choose the board. He calls the proposal “monstrous”, and unworkable, given the number of jurisdictions involved, and warned that this idea had been in the original deregulation legislation, but was dropped because it was not seen as workable, then dredged back by SB350.

At Abalone Alliance Safe Energy Clearinghouse, we share the concern that such a large, centralized grid could undermine a decentralized, smaller scale grid design and gives unfair market advantage to investor-owned utilities (IOU’s), who own the regional grids. Solar designs should allow us--should have the goal of--getting rid of a lot of wires.

We do understand, though, the effort of this proposal to unlock the far away wind resources of Wyoming and New Mexico. Local politics will likely not enable the shut down of coal fire and the rise of wind power in those states, but the economic incentives in this agreement are clear, but only to a point. Carbon emissions need to be tracked and squeezed out of the market economically in the whole grid, not just California’s wires.

We feel, if such a grid is established, that governance should adopt a consensus or super-majority type model. Consensus demands that we have a “basis of unity”, that we all know what each other want out of the agreement and nobody objects. The smaller the decision-making body, the higher supermajority should be employed. There are ways to incorporate a “quick decision-making” process for urgent matters. While consensus is a deliberative process, when used correctly, it can incorporate a wide diversity of opinions, as long as there is real basis of unity around the goals.

CPUC Commissioner, Mike Florio said it would be easier to incorporate just the coast states of California, Oregon and Washington, but it is more difficult to incorporate the coal power and different political climate of the mountain states. Perhaps we should start small, with the coastal grid, and add grid partners, like an EU, when they meet certain requirements, to be determined?